Evergreen's Offices Raided in Investigation into Directors' Stock Trades
The offices of Evergreen Marine and related companies, as well as the homes of several directors and their families, were searched on Monday, July 6, in Taiwan as part of an ongoing investigation into alleged insider trading by several individuals, including the sons of the late founder of the shipping line. Media reports in Taiwan indicated that nine individuals were being questioned, and six were required to post bail for their release.
Evergreen Marine, in a stock exchange statement, acknowledged the investigation. The company said it was cooperating with the authorities and that it was not affecting the operations of the shipping line.
The investigation stems from 2024 allegations filed by one of the company’s large shareholders, a lawyer in Taiwan. According to media reports, investigators found the allegations credible and decided to act to expand the investigation.
The shipping group was founded in 1968 by Chang Yung-fa, who passed away in 2016. At least two of his sons remain directors of the company and were among those individuals being investigated.
The company has been reorganizing its structure and, in 2023, announced plans to spin off the shares of EVA Air, which it had stated in 1989. Taiwan's second-largest airline, it is an international carrier.
The allegations are that the company decided in June 2023 to conduct the spin-off, but delayed the announcement for up to two months. In the meantime, several of the directors and family members purchased large amounts of Evergreen stock. It is alleged that this was done with knowledge of the related party transaction and before the details were announced publicly. The allegation asserts they made a profit of approximately US$65.5 million based on current exchange rates.
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Media reports indicate that the family members responded, stating that they had done nothing illegal and that the share acquisition had been reported to the stock exchange, as required. They said the timing was based on when the company went ex-dividend. Further, they stated that none of the shares have been sold.
Three of Evergreen’s directors were among the individuals questioned and released on bail. The bail amounts ranged from a high of US$3.75 million for one of the directors, to amounts of $310,000, $93,000, and $62,000 for family members. Three individuals were released without bail, and they were all ordered not to travel or leave Taiwan during the investigation.
